Chapter 5 Flashcards by grace steil

Flashcards in Chapter 5 Deck (6)

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if a company owns less than 100% of a company but more than 50%

the company is still required to consolidate 100% of accounts but must report a NCI non controlling interest.

portion of a subsidiary's stock held by another investor.

Non controlling interest

Where does NCI appear on the BS and IS

under the equity section of the consolidated balance sheet, and a separate line on the consolidated income statement

Why would a company Aquire less than 100 percent of a company

1. previous owners want to retain interest in a company
2. Buyer does not want to invest resources needed to purchase all subs stock.
3. Buyer cannot convince all the stockholders to sell
4. Smaller investment can be sufficient to achieve buyers goals

How do you value the NCI at Acquistiion

NCI reported at FV and proportioned to ownership interest.

How is Goodwill reported with NCI

attributed to each but not in ownership percentages

Chapter 5 Flashcards Preview

Advanced Accounting > Chapter 5 > Flashcards

if a company owns less than 100% of a company but more than 50%

the company is still required to consolidate 100% of accounts but must report a NCI non controlling interest.

portion of a subsidiary's stock held by another investor.

Non controlling interest

Where does NCI appear on the BS and IS

under the equity section of the consolidated balance sheet, and a separate line on the consolidated income statement

Why would a company Aquire less than 100 percent of a company

1. previous owners want to retain interest in a company
2. Buyer does not want to invest resources needed to purchase all subs stock.
3. Buyer cannot convince all the stockholders to sell
4. Smaller investment can be sufficient to achieve buyers goals

How do you value the NCI at Acquistiion

NCI reported at FV and proportioned to ownership interest.

How is Goodwill reported with NCI

attributed to each but not in ownership percentages

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Chapter 5 Flashcards Preview

Advanced Accounting > Chapter 5 > Flashcards

if a company owns less than 100% of a company but more than 50%

the company is still required to consolidate 100% of accounts but must report a NCI non controlling interest.

portion of a subsidiary's stock held by another investor.

Non controlling interest

Where does NCI appear on the BS and IS

under the equity section of the consolidated balance sheet, and a separate line on the consolidated income statement

Why would a company Aquire less than 100 percent of a company

1. previous owners want to retain interest in a company2. Buyer does not want to invest resources needed to purchase all subs stock. 3. Buyer cannot convince all the stockholders to sell 4. Smaller investment can be sufficient to achieve buyers goals

How do you value the NCI at Acquistiion

NCI reported at FV and proportioned to ownership interest.

How is Goodwill reported with NCI

attributed to each but not in ownership percentages

Key Links

Subjects

Company

Find Us

Brainscape's Knowledge Genome^TM

1. previous owners want to retain interest in a company
2. Buyer does not want to invest resources needed to purchase all subs stock.
3. Buyer cannot convince all the stockholders to sell
4. Smaller investment can be sufficient to achieve buyers goals